Pellet stoves heating up as oil prices rise

With oil prices on the rise, wood pellets are selling well in New Hampshire. (NANCY BEAN FOSTER/Union Leader Correspondent)

BROOKLINE -- The spike in home heating fuel prices, the bitterly cold weather and a tax credit that went into effect at the start of the year are all incentives pushing many Granite Staters to turn to wood pellets to heat their homes.

Chris Smith, manager of Abundant Life Stoves in Chichester, said that wood pellet stoves are extremely popular because they're easy to operate, produce a steady heat, and unlike traditional wood stoves, only need to be filled once a day.

"They're still extremely popular, especially with the cost of oil going up," said Smith.

John Fortunato, of Stove Keepers in Brookline, said that when the prices of fossil fuels drop, sales in pellet stoves drop, but in years where home heating oil costs skyrocket, pellets once again find their way into people's homes.

Charles Niebling, manager of New England Wood Pellet in Jaffrey, said that people are also motivated to buy pellet stoves this winter because the economy is improving.

"Coming out of the recession, consumers are feeling more comfortable about making investments in their homes that can save them money," said Niebling. "When the economy was bad, people couldn't afford to make capital changes that would save them money."

Niebling also said weather is a factor.

"We're actually having a real winter this year, unlike 2012, which was the warmest year in recorded history," said Niebling.

Advanced designs

There have been a lot of improvements to the technology behind pellet stoves, Fortunato said, though it's the simple process of an auger feeding fuel to the flame that makes pellet stoves efficient.

"The changes we've seen over the years tend to be geared toward safety," he said. "The guts of the pellet stoves have remained the same, but there are enhanced safety features and less maintenance in the newer stoves."

And while it's common to have a pellet stove in a living room or a kitchen, people are now buying pellet-fed water heaters and furnaces that can warm the entire home. The only drawback of pellets versus oil or gas is that homeowners have to manually feed pellets into the stoves and furnaces.

"The industry is working on developing technology to deliver the pellets into the stove without as much involvement from the homeowner, but right now, you have to be an active part of the process to heat your home with pellets," said Fortunato. "Unlike oil or gas, you have to touch this fuel."

Tax credits

At Fireplace Village in Bedford, President Ken Naylor said that interest in pellets and wood stoves has increased since the start of the year, when a biomass tax credit went into effect that gives homeowners tax breaks for buying the stoves.

"We are still seeing a lot of interest in pellet products, but we have also seen a big increase in wood sales as well," said Naylor. "With the biomass tax credit being reinstated, we hope there will be even more interest in 2013."

According to Smith, the folks who purchase wood and pellet stoves will receive up to a $300 federal tax credit.

"The tax credit is a bonus, but it's still cheaper to heat with pellets than it is with oil, even without the credit," Smith said.

Cost savings

Pellets currently cost about half of what oil costs to produce the same heat, and 40 percent of what it costs to heat with propane, Fortunato said.

According to the New Hampshire Office of Energy and Planning, the average price for heating oil is $3.873 per gallon; propane is $3.261 per gallon. Pellets are currently running around $245.80 for a delivered ton, or $4.91 per bag. And one bag of pellets equals 3.75 gallons of propane or 2.5 gallons of oil.